Prime Minister David Cameron and the Earl of Wessex were among the guests at the celebrations in Devon.

Admiral Sir Mark Stanhope, First Sea Lord and Chief of the Naval Staff, said he was delighted at the support given by the thousands of well-wishers.

"People across the country from all ages and backgrounds have a deep respect and appreciation for the Armed Forces, and Armed Forces Day is an excellent opportunity for us all to let our men and women realise how much they are appreciated," Sir Mark said.

"It is from our society that our Armed Forces are drawn and from our society that we draw our strength."

Around 6,000 people waved Union flags as Victoria Cross winner Lance Corporal Johnson Beharry climbed the steps of the National Memorial Arboretum.

L/Cpl Beharry, who paused to salute his comrades at the UK's centre of remembrance, said afterwards it was an "emotional" experience.

"It was very emotional because of the reason why I am here - to see the turnout is amazing and being here on Armed Forces Day as well.

"Armed Forces Day is important to see the general public is behind us and support us for what we do," he said.

The Government marked the day by announcing that new cadet units will receive £10.85 million so that more young people can join up and take pride in their community.

The Ministry of Defence (MoD) and Department for Education (DfE) said they had committed the money for 100 new units across state-funded schools in England by 2015.

The money will go towards essential equipment and training of staff. Interested schools will need to demonstrate they are able to provide the adult volunteers and third-party funding to maintain the unit.

Defence Secretary Philip Hammond said: "Cadet forces offer a great opportunity to gain life skills and we are determined to ensure that we open that opportunity up to as many young people as possible.

"The funding announced by the Government today will kickstart an exciting new phase in the development of our cadet forces - fostering greater social mobility and raising awareness of the values and ethos of our Armed Forces among local communities."

The day is marked to raise awareness of the contribution made by the Army, Navy and RAF, and to allow the public to demonstrate their appreciation. The Sunday Telegraph tirelessly campaigned for a day to recognise the work of servicemen and women across the three services.

Among the servicemen to travel to Staffordshire to watch today's event was Michael Hawkins, 71, and his wife Gill, 61, from Huntingdon, Cambridgeshire.

Mr Hawkins, who served in the RAF for 36 years, said: "I came here today because I thought it was very important on Armed Forces Day to do something that I consider significant, to come here to the National Arboretum, but in particular to see Johnson Beharry."

Mr Hawkins, who will be going to the Olympics with his family to watch handball, said: "Today is a hugely important day for our Armed Forces.

"The Armed Forces serve the Crown, their country and their regiment. They do it every day, they do it because they want to do it.

"I honestly believe it is one of the last institutions in the country that still shows the right moral values."